Greece's deal with international lenders for more money in return for more budget austerity lifted world equities on Friday and drained demand for safe-haven government bonds, according to Reuters. Wall Street looked set for moderate gains. Benchmark Brent oil prices slipped after tumbling to a four-month low in the previous session on news of an International Energy Agency-coordinated release of emergency stockpiles. The euro was volatile, strengthening after Germany's Ifo unexpectedly showed business confidence rising, but then as jitters build up about whether Greece would actually be able for adopt its new austerity programme. Late on Thursday, European Union leaders promised more money to help Greece stave off looming bankruptcy, on condition that the parliament in Athens next Tuesday enacts an austerity plan finalised in fraught last-minute talks with international lenders. Though still fragile, the agreement was enough to lure investors back into some riskier assets which they had dumped in the run up to the pact. "The agreement has been received well by the (stock) markets," said Ian Richards, European equity strategist at RBS. "We have got to get through the votes on June 28. It looks like it will go through, but it's not a formality. So the market is going to be cognisant of that near-term risk." World stocks as measured by MSCI were up 0.6 percent, hauling themselves just back into positive territory for the year-to-date. The pan-European FTSEurofirst 300 stock index gained 0.4 percent but was off highs after losing more than 1 percent in the previous session. Earlier Japan's Nikkei 225 benchmark gained 0.9 percent to close at a three-week high. EURO RISES Foreign exchange traders were less positive about the Greek deal, focusing on the struggles ahead for the euro. "The euro is struggling a bit and this deal isn't really a game changer," said Jeremy Stretch, head of currency strategy at CIBC World Markets. "It just brings into focus the hurdles the Greeks have to cross with these austerity measures." The currency was lower against the dollar at $1.4220 . News that shares in some Italian banks had been suspended from trading and continued nervousness over Greece's ability to execute austerity measures kept the currency on the back foot. Yields on core euro zone government bonds rose in line with the gains on stock markets. Investors, however, remained highly cautious about the state of peripheral debt, with the cost of insuring Greek and Portuguese debt rising. (Additional reporting by Anirban Nag and Atul Prakash; Editing by Hugh Lawson) REUTERS 1455 240611
